Another 8-handle? — Hopefully, you had a better weekend than the millions of small businesses in America who are getting squeezed by higher labor prices and increased materials prices with associated COGS expenses.
A soft landing is a rare occurrence. Consider how strongly the Fed executed its easing. This is basically a directional shift approximately 180 out from the fiscal and monetary environment from a year ago.
And it looks like everything that the Fed has done to date hasn’t exactly fulfilled the peak inflation storyline like pundits thought about a month ago.
Last week’s economic data was, well, not great. The CPI print came in with another 8-handle, and consumer sentiment, as reported by the nerds in Ann Arbor, was lower than it has literally ever been in the history of their survey.
The silver lining is that a depressed consumer means that inflation might eventually cool off. The bad news: it appears that inflation is around to stay for a while as we watch it move sideways.
The consumer is struggling, and the retail names that we have been so critical of in the last few weeks are going to really feel the squeeze. As we have seen these companies cut their guidance, things appear to only be getting worse.
The truth is in the data, and it would appear that the macro headwinds are blowing stronger than ever.
I don’t give financial advice, but I am personally buckling up for continued volatility, further valuation compression, and a risk-off rotation in the markets.
You be your own judge, apes. Good luck.
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